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tv   Worldwide Exchange  CNBC  August 26, 2013 4:00am-6:01am EDT

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hello, everybody, welcome. it's monday. you're watching "worldwide exchange." these are your headlines from arno around the world. angela merkel tries to reassure voters that greece will not need another writedown as the finance minister eyes a return to markets late next year. germany's industrial giants remain focused on domestic matters. we heard exclusively from ceos in the heart of what they think makes europe's biggest economy competitive. >> we have a situation in germany which is a culture, we
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obviously have an engineering culture. it is what we are living off. and it's merger monday in the pharma sector with a deal worth more than $10 billion. and failure awaits the united states if it takes action on syria. that's the threat from president assad as u.s. experts are allowed now to visit the site of an alleged chemical attack. you're watching "worldwide exchange," bringing you business news from around the globe. >> hi, everybody. welcome. you are watching "worldwide exchange." we're with you for the next two hours in good company, i hope. we've got a lot of guests lined up. and on today's show, despite the ongoing success of south korea's export economy, is it time for change? we have a special report in about 15 minutes' time on that front. maverick australian
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billionaire clyde palmer is running to be the country's prime minister. can he succeed? we'll be hearing from down under at 10:30 cet. this week we're also bringing you a whole series of reports on the risks and rewards of investing in frontier markets. this is interesting. at 10:30, we'll kick off with a report on why frontier economies are avoiding the emerging market slump. and do you remember when greece was key to europe's economic future? at 11:00 cet, tune in to hear why credit suisse believes that the country won't need major debt restructuring and that nobody needs to worry about it anymore. fat fingers, typos, freezing borses. a number of glitches are dominated headlines in recent days. at 11:30 cet, we'll be crossing to kron toe for a view on the nasdaq's three-hour trading halt which happened last week. as usual, you can get in touch with us directly at
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worldwide@cn worldwide@cnbc.com. you can also find us directly on twitter. put it into google. it's very easy. with any questions or comments. of course, it is a bank holiday here in the uk. so no trade in the uk, but trade everywhere else. so we're still with you. now, the german chancellor, angela merkel, has told voters that greece won't need a further debt writedown, but she stopped short of ruling out further aid to the nation. speaking with germany's "focus" magazine, the chancellor said she was expressly warning against the haircuts and that it would create a domino effect of uncertainty in the eurozone. now, this comes as the greek finance minister has said that although the nation may need a third bailout, it could not accept fresh austerity measures, separate things. he added that a further loan for greece could amount to around 10 billion euros. the national association for
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business economics released a survey today showing that while many economists think that the fed's current policy has been a success, quote, unquote, most don't believe that the fed will start tapering until after the september meeting coming up. only 10% of economists expect the winddown to start before the end of september, while 39% expect the first tapering to happen during the fourth quarter. so that's been pushed out just a tad, right? the rest, they aren't expecting a scaleback until at least 2014. separately, most nab members say that future deficits are a bigger concern than current shortfalls, but they're divided over how to best address them. now, our "global markets report" indicates that our european markets this morning are opening in slight negative territory. we're just seeing a little bit of negativity at the moment. we initially started off just flat to a little bit stronger,
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tracking some gains happening on wall street and asia and nasdaq ending up after that technical outage on friday, microsoft being one of the reasons why. we saw a big jump after we heard of the retirement of steve ballmer. asia markets also positive, but europe this morning just coming off a bit. as i said, public holiday in the uk, so you have to factor that in. volumes are very light in today's trade. the fixed markets -- the fixed income markets, we're seeing a little buying taking place in the yields around 1.9%. and a bit of selling in the italian, the ten-year treasury market and the ten-year gilt market. pushed higher across the board there. currency markets, we've been flat in trade this morning. that continues to be the dominant -- what do you call it -- the dominant thing taking place at the moment. the dollar-yen down by 0.2%. you're seeing flattish trade in the euro-dollar, the
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aussie-dollar and sterling against the dollar as well. but i was just mentioning what took place in asia in the overnight session. li is in singapore. take it away. what's been taking place for our viewers in europe who might just be waking up and joining us. how's asia? >> thank you. a good start to the week for asia. china markets gained almost 2% today by overall positive corporate earnings and the free trade zone pilot program in shanghai. but a choppy session for japanese stocks hurt by concerns over the consumption tax hike. the nikkei 225 lost almost 0.2%. the kospi got a lift by auto and steelmakers finishing higher by nearly 1%. earnings news in focus in china. the country's number two lender added ed 0.7% after q2 earning slightly beat forecasts. and asia's largest refiner rose almost 2% after posting a 22% jump on its bottom line.
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but byd shares tanked almost 11% today. warren buffett-backed automaker saw its first half net profit rise 20 fold but warning the third quarter could be tough. in japan, index giant tepco among the biggest losers after reports of radioactive water leaks. the stock tumbled almost 7%. but real estate stocks lent some support on hopes that construction demand could pick up as tokyo bids for hosting the 2020 summer olympics. meanwhile, australian gold miners powered ahead tracking the strong prices in recent sessions. kingsgate rallied some 4% to 6% today. back to you. >> thank you very much. we'll talk to you a little bit later on. joining us live out of singapore.
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now, it is, of course, the run-up to the germany elections. and we're very closely going to be covering this a lot more, obviously, up to the actual elections take place in september. our reporter joins us in munich. good to see you. it's monday. a fresh week. >> reporter: yes. a fresh week and me being in munich to actually speak with people here on the ground, what they think about the government, what they want from the future government, but as well as caught up with entrepreneurs and spoke with them about their business climate right now in which they are operating. munich very economically successful area, probably the most successful area among german regions with unemployment at below 4%. last year it was 3.8% which one could really say it's almost full employment. and i, of course, as well asked
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about the german specifically -- well, the german character trades and as well what makes the german economy so successful when i caught up with the ceo of infineon. just take a listen. >> we have a situation in germany which is a culture. we obviously have an engineering culture. maybe it's not at the forefront of everybody thought, but that is what we are living off. look at our automotive. look at big industrial companies who are supplying. the medium and small enterprises which are offering outstanding specialized solutions, and all of this is based on innovation capability on grieater years brought to success. >> reporter: we also traveled to nuremburg. you might know it because of its christmas market, but it is as
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well home to one of the biggest car parts suppliers here in germany, leoni. and i asked the ceo of leoni what he thinks needs to be done as well to preserve that position. >> there's a lot of things to be done, of course, to, let's say, to prepare ourselves. also for competitiveness in the future. in the last couple of years especially in our industry, in the automotive supply industry and metal and electric industry, we have seen very good cooperation of the units. very good agreements of the units in terms of labor cost increase. and so this has helped us to be more competitive today than other european countries. >> reporter: i'm also joined here by the president of the bavarian finance center. we were just hearing from the leoni ceo that it is as well
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because of wage moderation that german companies can be in such a successful competitive position. do you think that it's here to stay, or what is going to happen with wage increases? >> i think that one often not mentioned explanation is that germany has a very good functioning bureaucracy. that's a fine infrastructure, many other countries have the same kind. especially if i look to greece. i'm surprised that germany is as competitive, but german entrepreneurs are innovative. they work hard. and therefore, in the long run, i'm quite positive for the futu future. >> reporter: so especially taking a look at that region, you're, of course, the president of the bavarian finance center.
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what makes that region different from others in germany, and how -- is that going to stay? will they continue to be so successful? >> they will stay -- bavaria has a god-given advantage, very nice skiing regions, many lakes and many like to come here and therefore companies behind us as the headquarters of siemens or bmw, audi, have no difficulties to find good managers and good employees. >> reporter: as we were discussing as well, the bavarian elections coming up. if that is going to be an indicator for the general election. so what do you think? can we read something out of those elections? >> yes, we can read something out of it, but normally, the
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elections in bavaria are very special elections. that means we have an indicator, and many germans not knowing yet what they will do in the election. i fear that many germans are so disappointed with policy that we will not go to the election. >> reporter: angela merkel is coming here to bavaria and to munich to campaign. what is the feedback from those election presentations? >> i don't see the big difference between the two leaders. and that's a problem. if there is no difference, one has to be very loudly to find new germans to elect, and
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therefore, a great coalition would be very possible. >> reporter: is that as well what you're hearing from corporations or companies here on the ground, that they want to have a grand coalition going forward? >> they don't say it in public, but i think they hope that that will come. that gives certainty, but they fear that the tax rates will be higher then. and without spd, they would be more happy if the tax system wouldn't be changed. >> reporter: so the companies you're speaking to as well as voters, which kind of outcome would they prefer for the elections? >> they think in the mainstream very conservative, and therefore they would be happy if policy would go on as it is at the moment, but they can live with a
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change in the policy. they are very international and not depending on germany. >> reporter: and talking about being conservative, we were just as well talking about the fact that bavaria is a very conservative region of germany. is that as well something to keep in mind when speaking about doing business here in that region? >> no, i don't think so. there's a quite interesting mixture. one is thinking conservative, but one isn't acting conservative. one is very innovative, and this is for many years a specialty of bavaria, and that's the advantage of bavaria. on one hand, you have the stability of conservativism. on the other hand, you have innovative, especially small and medium-sized companies, many of them in germany, finding equity, and it's a very good situation.
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>> reporter: so now we were praising germany across any kind of topic. what is there as well in terms of downside risk to the germany economy? can we as well take a look on the banking sector? i know you're an expert to banks. >> i think the banking sector was very, very expensive for the german taxpayer. but nevertheless, the problem of germany is a problem of europe. and we have to learn in germany and in bavaria, too, that we are in the middle, and that will cost much money, but there is no other way. and in the elections, the danger is there are so many disappointed germans that maybe that will change the future situation. >> reporter: thank you very much for your time. thank you.
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well, that was the chairman and president of the bavarian finance center, speaking with the bavarian economy, but as well the outlook for that region. i'm sending it back to you. >> isn't there a certain type of cake you're supposed to try if you're in the bavarian region? i seem to remember there's some type of a -- >> reporter: cake? >> yeah. or am i getting it wrong? bavarian cake? scone? >> reporter: no, i think it's more like sausage. >> well, that, too. yeah. >> reporter: you're not supposed to eat after lunch. >> i know, exactly. never after lunch. i'm going to have my bavarian sausage within the next two hours before lunch. >> reporter: express. >> we'll see you again here on the program live from bavaria with the bavarian sausages. is it time for south korea to change its economy? or is it a case of if it ain't broke, don't fix it? we'll have a special report after the break. you're watching "worldwide
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exchange." it's monday morning. more to come. could be simple? well, now it is with truecar. just go to truecar.com, configure your car, and get connected... to a truecar certified dealer... for guaranteed savings. save time, save money, and never overpay. visit truecar.com [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time. [ telephone ringing ] now a waiting room is just a room. [ static warbles ]
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hi, everybody. you are indeed welcome back. a deal to sell kpn's german
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mobile unit has won backing from american mobile. kpn said after negotiations involving all three firms, it will now sell its german e plus unit. following the announcement, they launched an offer to buy shares that it doesn't yet own at 2.40 euros each. now, it's merger monday. amgen striking a deal for about $10.4 billion in cash or $125 per share. onx rejected an earlier bid in june. it's a 44% premium. onyx makes several drugs including treatments for liver, kidney and colorectal cancer as well as mult peiple myeloma as
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well. know, another trading error has come to light. this time in israel. shares in the israel corporation the country's largest listed company fell by 99.88% at around midday in the trading session on sunday. yesterday. that's a huge drop. "the globe's" newspaper is reporting that a trader put through the order to sell, thinking it was another company. the error saw tel aviv's index fall by 2.5%, triggering an automatic shutdown in trading for a short time. but both the stock and the index largely recovered the losses by the end of the session. and goldman sachs has reportedly put four senior tech specialists on administrative leave. in the wake of last week's trading glitch that flooded the market with unhads of bad options trades. "the financial times" says around 80% of the mistaken contracts sent to the new york stock exchange were canceled,
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but the glitch provoked a strong reaction within goldman which prides itself on risk management. dow jones is reporting that goldman's losses will be limited to tens of millions of dollars. and here we go. goldman's shares on the session, a little bit higher, again, in germany trade in the last 30 days off by almost 5%. but what's the biggest or in this case the costliest mistake that you've ever made in your job? or if you want to join us on the bavarian cuisine discussion, sausages before noon, i'm not sure about that one, let us know. join into the conversation here on "worldwide exchange." you can get in touch directly with us by e-mail, worldwide@cnbc.com. you can also find us on twitter @cnbcwex. loads of options to get in touch with us on had monday. the costliest mistake you ever made or the biggest mistake you ever made. i can think of one or mistakes
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that i've made in my past, but luckily some very kind people helped me out. we all have that, don't we? when we're just starting out in a new job, for example. let us know your experiences. we'd love to hear from you. while fed fears continue to weigh heavily on investors' minds, the atlanta fed president dennis lockhart told reuters on saturday that he would be comfortable with a cautious staling back of its bond-buying program which is expected to be announced at its next meeting. speaking to cnbc on friday, lockhart said he could favor a september taper, provided that there were no really worrisome signs in the economy. >> the way i'm thinking of it at that moment is i'm actually looking at the data and asking if they deny or in some way undermine the basic outlook that i have in place. and on that basis, then i could get comfortable with a move in september of some kind. >> now, lockhart also agreed that the august jobs report will
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be the key number to watch between now and next month's meeting. it will be, right? bigger numbers to look out for. now, south korea's corporate successes are well documented, being among the global leaders in ship building, in autos and technology, even pop culture. on the economic front, though, the country's emergence from poverty have also been noteworthy. today we're kicking off a week of special reports on the trillion-dollar economy. chloe chao reports on why the export-oriented growth model that has driven so much of south korea's successes now needs to change. >> reporter: this 35-year-old is a wife and mother in a typical working-class family. she quit her job 1 1/2 years ago to care for her three sons, all of whom are under the age of 5. with her husband's income of 6,000 u.s. dollars a month, they're just making ends meet. >> translator: both of us came into this marriage with debts of our own.
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and because of this, it's not easy. if we started out without any debt, i think we'd be able to save about 50% of what we earn. >> reporter: and it's families like lee es that show the economy. so much so that president park made it one of her first major initiatives. in march she announced a $1.35 billion fund to provide debt relief to korean households. >> there has been a decoupling between the growth of the economy as a country and the well-being and the wealth creation of the korean households, especially in the middle class. >> korea's big challenges is there are world-class companies that are quite profitable. however, the labor intensity of the industries in which they're involved is not high, and so as korea's profits grow, the
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average korean is not seeing it in either employment or income growth. and so there's great frustration. >> reporter: and this explains why this miracle economy probably can't continue to rely on its export-oriented growth effort, especially as it enters an era of low gdp growth. >> i think the real significance is the fact that korea and the private and public sectors all realize that a new approach is need to do grow the country and create wealth. >> reporter: so what could this new growth plan look like? mckenzie published a 90-page report suggesting tweaks in core areas, strengthening middle-income finances, expanding the services and sme sectors and addressing perhaps the biggest challenge facing this economy, the aging population. while there appears to be urgency on the part of the government of president park to address these challenges, whether or not she can deliver is the trillion-dollar question. >> it's going to be very hard to fight those interventionist
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tendencies. if they can do it, korea will have a great productivity boom. if they can't, then we're going to face similar problems to what we had today. it will be worse because debt levels will be higher because we'll have had to have turned to debt and government spending to close the gap. >> reporter: despite their debt, lee and her family are content, but having been raised by families who were also in debt, they're hoping to break the vicious cycle with the next generation. chloe cho, cnbc, seoul. >> well, south korea was badly hit by the '97 asian financial crisis, needing a bailout from the imf. chloe asked the country's finance minister if he was concerned that history could repeat itself. >> translator: that depends on how tapering proceeds. this is why it's important for korea to adopt a growth model based on exports and domestic consumption. financial markets won't be prone to such seismic shifts if kree
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cont korea's macro economic fundamentals are sound and korea is able to maintain its credit rating. still to come on the show, the syrian president bashar al assad has said that any military intervention by the u.s. will end in failure. is he goading his opponents? we'll be hearing from the french institute for international relations, what their opinion is after the break. there's a new way to buy a car. it's called truecar. and truecar users... save time and money. so when you're... ready to buy a car, make sure you... never overpay. visit truecar.com today.
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no need for a haircut. the german chancellor, angela merkel, trying to reassure voters that greece will not need another writedown as the finance minister eyes a return to mar t markets late next year. german's economic giants focused on matters. we hear exclusively from ceos in the heart of bavaria to find out how they do business in china. >> if you decide to dance with the lion, you have to be a bearer of his teeth. and it's merger monday in the pharma sector as amgen buys up onyx for more than $10 million. and failure awaits the united states if it takes action on syria.
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that's the threat as u.n. experts are allowed to visit the site of an alleged chemical attack. if you're just joining us, good morning, everyone. welcome. it is a holiday in the uk. you might be watching us from bent this morning. in that case, take it easy, have a cup of tea. there's a little bit lower. ibex off just about 1%. this comes off the back of a stronger close stateside as well as in asia on friday, despite the fact that we, of course, were dealing with the three-hour nasdaq outing that took place at the end of last week. the bond markets, we've been focusing a lot on yields heading higher at the moment. they're still heading a little higher where we're looking at a level of 1.92, coming down just a tad. i was looking at what's coming up later on this week. we've got the ministry of finance in japan selling
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approximately 2.9 trillion yen worth of two-year bonds, also a 20-year government bond auction in japan taking place tomorrow which could be important, $12 billion worth of that. the currency markets, flat trade today. the dollar-yen off by a tad. you've got the dollar-swiss trading a little higher. coming into the week, pretty flattish i think it's fair to say. back to one of our top steers, the syrian president assad has said that any military intervention by the u.s. will end in failure. meanwhile, the syrian government has agreed to let u.n. inspectors into the country. the white house says that the move has come too late to be credible. joining us on the phone now from paris is dominique, special adviser from the french institute for international relations. dominique, thank you for being with us. the white house saying that the move to let u.n. inspectors into syria is too late to be credible, quote, unquote. is it?
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>> yes. yes, i think the syrians have tried to have enough time to hide any reality, so what the americans are saying corresponds to the truth, yes, absolutely. >> what does the purpose of the trip serve, then? what will the u.n. inspectors get out of this trip? >> probably very little. but they have to do it. if not, the credibility of the u.n. would have been smashed. but you have to realize that there was a significant time between the moment the chief inspector arrived in damascus and the moment she's allowed to go on the site of the tragedy. >> it does feel like the situation has intensified quite
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a bit over the last two weeks especial especially. i'm not saying it hasn't been intense over the last two years, with more than 100,000 people having lost their lives in the syrian crisis, but it feels like the international community is kind of garnering more momentum at the moment, and i know there's a lot of speculation about whether or not we will see an attack launched on syria by foreign forces. do you think that that is -- is that a possibility? could it be feasible? >> yes. there was a turning point of physical and psychological nature. a red line was crossed. what is at stake is the risk of views of chemical weapons, weapons of mass destruction by a government on its citizens. so it is very important that there should be a reaction. what is at stake is the
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credibility of the united states. but even more so, the workability of the international system. so one can say that because the west has refused to help the rebels two years ago, they will have to use their force directly against the regime in the coming days or weeks. >> who do you think should lead this if it were to happen? because right now there are kind of groupings of leaders talking. but it's still very unclear who's kind of taking the actual lead. >> well, i think the french and the british are exerting pressures on the united states to lead. and the natural leader is still the united states of america. and we are in a situation that is not that different from that
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viewpoint from the 1999 in the balkans where an intervention took place in kosovo without a legal authorization from the united nations, but an intervention that was deemed as legitimate because here again, a government was killing its citizens. >> how, though, do you intervene when you're not quite sure who you're supporting? when i look at this from the outside, it's hard to know currently who the so-called rebels are on the ground. obviously we know who the government is, but it's a very delicate balance to play when in all cases you are potentially bound to get it wrong. >> yes. i think you are absolutely right. the risks of intervention with enormous. you don't know whom you are supporting. you don't know what's going to be the reaction of syria, of
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russia, of iran or even for that matter of china. but you have to compare the risk of intervention with the risk of indifference and inaction. and these risks, in my mind, are even higher. here again, i return to the risk of the use of chemical weapons by a government. again, its citizens, or for ma that's right, by a government in any case. this is the most serious breach of the international order that you can think of. >> dominique, thank you very much. dominique moisi, special adviser from the french institute for international relations. now, according to reports, the japanese government is seeking presidency of the g-20 meeting in 2016. our reporter from the nikkei has the story live from tokyo.
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2016, we're slightly a ways off still. >> reporter: yes, yes, that's quite the case. but the g-20 presidency rotates among its members every year. and if japan wins the seat for 2016, it will be for its first time. the g-20 president can set the agenda for the meeting and also host major events including the leaders summit and meetings of finance ministers and central bank governments. holding the presidency in 2016 will also coincide with japan's chairmanship of both the g-8 summit that year. tokyo is hoping that by hosting two major events in the same year, this will boost its influence in the international community. but china as well as indonesia are seen to be as vying for the chair, and much diplomatic maneuvering may be needed to secure the role. that's all from nikkei business report. back to you. >> thank you very much. we'll speak soon again. now, sticking with politics, clyde palmer is now running for prime minister. matthew taylor has all the
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details from the launch of the campaign at palmer's queensland resort. >> reporter: he's the larger-than-life billionaire who's building the titanic. and now he wants to be prime minister. clive palmer this weekend officially launched his election campaign, saying the palmer united party will reunite the nation. >> men and women of australia, we meet today in a country known for its strength among people known for their resilience. we find our nation in need of both. strength and resilience. >> reporter: hoping to snare some of the vote away from the major parties, clive palmer says his experience in business means he knows how to run the country. >> this election has been devoid of ideas. neither have offered any hope for australia. >> reporter: clive palmer made his fortune in mining, first
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iron ore and then nickel. earlier this year he announced he'll build a replica of the "titanic" that will set sail in 2016. >> the "titanic" stands as a monument of hope of all the people who came to america to fulfill their dreams. >> reporter: but it's not only sh ships. maller plans to build a "jurassic park"-inspired display in queensland. this is the first of what could be as many of 100 animatronic dinosaurs. it stands 3.5 meters tall and is 20 meters long. it's an impressive sight greeting guests as they arrive the at the resort. unlike the real dinosaurs, clive hopes his political ambitions will survive for many years to come. matthew taylor, cnbc.
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>> that's one guy i wouldn't want to meet. the dinosaur, that is. coming up after the break, as emerging markets have slumped and developed economies stall, is it time to go further afield? after the break, we'll be hearing why frontier markets could help your portfolio. much more to come here on "worldwide exchange." see you in a second. could be simple? well, now it is with truecar. just go to truecar.com, configure your car, and get connected... to a truecar certified dealer... for guaranteed savings. save time, save money, and never overpay. visit truecar.com otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business.
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you are indeed. hello, everybody. as the german election looms, the major contenders will be looking to strengthen support from the country's powerful industry barons. the politicians, they'll most likely be looking to cozy up to export giants who seek good relations with major trading partners like china for an example. just looking at some german stats there on screen for you. annette rejoins us from munich once again. so the export scenario, very, very important, obviously, for germany, annette. >> reporter: well, it's extremely important. and china is very important as well to, of course, for german product and as well for german industrial conglomerates. during the last earnings season, one heard a lot of warnings
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about weakness in chinese growth. but on the other side, the company owners or ceos i spoke to here in the munich region, actually, were quite optimistic about china, and that is, of course, depending on to who or which kind of products they are selling in china. consumer products are still working quite well. one of the companies i spoke to is infineon. the ceo -- listen into what he had to say about china and the outlook. >> we are a global company. our presence in china is a key success factor for us. around 40% of our today's business is already in asia. half of it in china. so china is a key marketplace for us. china is developing from a country where you mainly were doing revenue, people doing manufacturing for the rest of the world to a country which is
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more doing local designs. and we have to follow that need. we have to support locally the requirements of those industries who want to understand how to use our products best. my feeling is that you see a certain level of the new leadership in china bringing the country on a more, let's say, quiet but strong road. >> reporter: so you're not that negative like some other ceos of german companies about the outlook for china? >> well, if you have a country which used to grow at 7.5% or more, then current growth is more around 6% which is something you have to be able to digest. we have seen a downturn in the last years that there is an overcapacity which still has to be utilized before further growth and further growth for the rest of the world,
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especially germany as one of those countries which is a contributor to installing those will drive the growth. but what we see is in automotive, there is a continued demand for higher-end cars and the growing wealth in the country is still to be seen. as well as the desire of everybody to participate in. >> so infineon still can ride the wave of consumption in china as well with their products. >> here we really are preparing ourselves, setting up a local organization. we have started a project called china local citizen. we are a german company acting globally. but to be successful in china, you have to think chinese. and it's different than we do it here. and our people here have to learn what it means to be successful in china.
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and that you need a strong local organization which is driving it at the place of demand. so it is not simple, but we bet on it, and we believe we can be one of the successful ones in it. >> reporter: recently "the economist," i don't know if you are reading that publication, had a great cover, saying the great deceleration in showing russia, china and india and other countries as well trying to make its way -- their way out. so how much are you worried about that great deceleration? >> well, the deceleration, i'm pretty sure there will be kind of a normalized growth. total economy worldwide does not depend only on those brick countries. we see a lot of asian countries are accelerating compared to where they had been. indonesia, philippines and others are fueling growth.
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so i think their ability in many growth drivers we can bet on. and i think there's also a lot of need in the total economy. >> reporter: a lot of people actually were worried about that deceleration in emerging markets for german growth and what does all that mean for as well the german export, but it doesn't really seem that badly. i caught up with a major car parts supplier, leoni, close to munich and nuremburg. let's take a listen to what their ceo had to say about emerging market outlook. >> we have to continue to globalize our business even stronger than in the past. today, 45% of our business is done outside of europe. this has to be grown. we have to continue to grow in china, in the brick countries
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mainly china and india are on a good track so far, but we also have to grow our business in europe because i personally expect after a couple of weak years of the economy, weaker economy in europe, there will be a recovery in two years' time. and then we have a good position to continue to be a good supplier industry to the worldwide markets out of europe. >> now, this week we'll be crossing the frontier. we'll be looking at the investment cases for a couple of other markets as well. julia, my colleague, takes a look at the risks and rewards the countries like nigeria and qatar. >> reporter: during the last five years, the financial crisis has engulfed the global economy. throughout that time, frontier markets have been closely correlated to the performance of more mature markets. then came may the 22nd, and the federal reserve chairman ben bernanke indicated he could begin tapering the u.s. central bank's massive bond-buying plan. and things changed.
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what developed in emerging market indices have been spooked. the mcsi frontier index continues to push higher. investors have gone from looking at frontiers as a group that feels the same pinch as other markets to examining the individual characteristics of each countries, looking for investment potential. so what exactly is a frontier market, and just how do you invest? we're talking about countries with investable stock markets that are less established than those in emerging markets. countries that form the index include nigeria, ghana in africa, qatar in the middle east, vietnam and pakistan in asia. over the last 12 months, the index has risen over 20%, significantly outperforming the emerging markets. but the frontiers are not to everyone's taste. >> i think the easy trade in emerging markets is over. it was a very nice sweet spot for ten years, but i agree there
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are great opportunities there. but i would not look out for research in those markets because that's not where the opportunity is. so if you want to do that, then trade in s&p index futures. but of course there will be winners and losers and less winners than losers. but if you apply to emerging markets and frontier markets, i think there are great opportunities emerging. >> reporter: so investing in frontiers is not for the faint-hearted. but while investors may have concerns about the security of putting their money in more volatile markets, exotic, a frontier market brokerage, says the main risks of these economies may not actually be where you think. they cite the slowdown in europe and the end of qe as the known unknowns affecting these markets, too. so while investing in nigeria breweries or co-op bank of kenya may seem about as foreign as investors can get, it seems the frontiers can never completely
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decouple themselves from the familiarity of the mature markets either. >> and over the course of the rest of this week, we'll be looking at a region a day as we take the hunt for yield further afield. lots going on in these particular markets. now, earlier we asked you what's the biggest mistake that you've made at work? this after a typing error caused the tel aviv stock exchange to plummet. peter tweeted, "my mistake was flooding the cafe when i was doing dishing add chocolate brown in new zealand." flooded the entire cafe. not a good look, i'm assuming. i hope you were wearing wellies. find us on twitter. we're also talking about bavarian cuisine this morning, interestingly enough. because annette, of course, is there. it's marinated cold sausage cut in thin slices with onion rings. we have chris writing through. he says bavarian mints might be a good idea if you've had a dish like this.
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i also note in bavaria, they say it looks like bread, but it's meat. literally translated, it would be liver cheese, but there's neither liver nor cheese in it. so in other words, you make a carrot dish and you call it potato soup. makes sense to me. keep your responses coming through. @louisabojesen. on the agenda in asia tomorrow, we're going to be getting reading on australia's second quarter. stepping up with july industrial profit figures and a whole bunch of corporate earnings as well from hong kong including china's citic bank. dongfeng, motor and samsonite. still to come on the show today, we'll be talking more about bavarian cuisine, no doubt. we'll also be talking about your mistakes, your biggest mistakes. i'll read out some of the responses a bit later on. and on top of that, angela
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merkel has told voters that greece will not need a further writedown. we'll be discussing your periphery in german elections in a couple of minutes.
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hi, everybody. welcome back. you're still watching "worldwide exchange." these are your headlines from around the world. no need for a haircut. german chancellor angela merkel is trying to reassure voters that greece will not need another debt writedown as the greek finance minister is eyeing a return to markets late next year. but germany's industrial jinggi remain focused on domestic matters. we hear exclusively from ceos in the heart of bavaria what they think makes europe's biggest competitive competitive. >> the legal requirements which makes us flexible in terms of
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hiring people or getting rid of people. this is necessary for us to be cross-competitive. and it's merger monday in the pharma sector as amgen is snapping up onyx. and failure awaits the united states if it takes action on syria. that's the threat from president assad as u.n. exports are allowed to visit the site of an alleged chemical attack. you are indeed. welcome. if you're just joining us from the states, welcome to the show. we've got an hour left of "worldwide exchange." if you're here in europe, maybe you have a day off if you're in the uk because it's a holiday here. enjoy your day off. think of us. send us a kind thought. look ahead to how the u.s. markets could happen, this afternoon we've got -- well, this afternoon our time. we've got a couple of hours to
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go before morning open stateside. we're looking at a flattish open to a little bit lower, if anything, right now. our european markets this morning, we initially were called a bit higher following off after a stronger close in the u.s. on friday. strong asian showing overnight as well. we've been very much around that flat line, just a little bit lower at the moment now. just seeing an increase in selling in some of the periphery marx. the xetra dax off by a tad, cac 40 off by 0.7%. the eye decks oibex off by almo. yields pushing a little lower in germany. a little buying into sort of the so-called safe haven assets in germany. you've got a little bit of selling taking place in the ten-year italian treasury and the gilt market just pushing yields a little bit higher there as well. currency markets pretty maflat. looking out for bits and pieces
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of data. the payroll this month could be very interesting especially heading into the potential of fed tapering come september. so that will be an interesting or an important number to watch out for. the euro-dollar now flattish, 1.33, seemingly that level we've been hanging on to for quite some time. the dollar-yen just a tad lower. now, we need to talk about the global markets as we head further into our european trading session. in asia, let's see what's been taking place there. if you're just joining us, li is in singapore. good to see you once again. >> yes, thank you. a largely positive session for asia. china markets rallied almost 2% helped by overall positive corporate earnings from names like china construction bank. but a choppy session for japanese stocks hurt by concerns over the consumption tax hike. and the nikkei 225 lost 0.2% today. as for individual movers, we are watching shanghai-based
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companies. the cabinet finally approved the free trade pilot program in shanghai. the biggest and first of its kind experimental project that's part of beijing's effort to reverse the country's economic slowdown and press ahead with financial reforms. quite a few shanghai-based stocks with the free trade zone concept surged up by 10% today. in japan, index giant tepco among the biggest losers after news of radioactive water leaks at its fukushima daiichi power plant. but some stocks lent support on hopes that construction demand could pick up as tokyo bids for hosting the 2020 summer olympics. meanwhile, australian gold miners powered ahead to tracking the strong prices in recent sessions. newcrest, kingsgate and laser gold surged some 6% today. back to you. >> sichuan, thank you very much for that. we'll speak soon again. now, the german chancellor,
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angela merkel, has told voters greece won't need be a further debt writedown. speaking with germany's "focus" magazine, she said she was expressly warning against a haircut and that it would create a domino effect of uncertainty in the eurozone. this comes as the greek finance minister said that although the nation may need a third bailout, it could not accept fresh austerity measures. he added that a further loan could amount to around 10 billion euros. meanwhile, the troika set to arrive in portugal later on this week ahead of its eighth quarterly review of the country's economy. the mission was delayed for mid-january in response to the political crisis that saw the finance minister and the foreign minister exit the coalition government, forcing the prime minister to reshuffle his cabinet. joining us from paris is the head of research at credit suisse.
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good to see you. what do you anticipate that we'll learn with regards to portugal this time around from the troika? >> well, if i look at the seventh review that was just a few months ago, things are really going into the right direction in many respects. it doesn't seem that much, and there's still many challenges ahead, but i feel that, you know, we've reached a point where a lot of the assessments show that some of the progress that has been made are really being taken into account and do provide some kind of results. and that was very important when we saw the second quarter numbers, there was definitely better than expected. that was true throughout europe. the gdp growth numbers were good, but they were particularly good in portugal. so not enough to be really reassured for the rest of the year or next year. nevertheless, some of the efforts that have been undertaken bear fruit.
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of course, the question remains whether portugal can really exit the program it's been under with europe next year and resume full access market. that's one of the questions that is still pending, obviously. >> how much do you think that a potential third greek bailout could threaten portugal's ability to return to the markets? >> i don't think these two issues are really linked. i mean, we've seen a lot has happened since the greek crisis. the question of contagious effect throughout the periphery i think to some extent is pretty much behind us, and i'm not sure one would entail the other. coming back to greece, the question is whether they would get a bailout and what kind of a bailout is also out, and we don't know exactly what is going to happen. what is clear is that these
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issues have a very strong domestic as well as european political side of them, for one thing. second, obviously greece is looking for some extra help with regard and exchange of some continuous effort that have been proved to be quite significant, over the past months. the question remains as well how much growth we can generate. >> valerie, just assuming that many of our viewers waking up this morning may be joining us from the states that they're not following the portuguese economy on a day-by-day, step-by-step basis and just to let them know that last week we saw the very strong print of the second quarter gdp. a huge jump, strongly emerging from recession. 1.1% growth. what happened, and is this kind of the turn of a page, or do you think it was kind of a one-off strengthening? >> well, there were some one-off elements into this number.
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obviously, we do not expect that to continue on the same basis. however, part of europe is benefiting from previous efforts, and we saw expert exp going up for one thing. we expect there to be a further stabilization in corporate investment, and that helps definitely to see a reversal at least in the quarterly numbers of growth. that is not going to be enough. portugal feels really severe challenges in the name of both constraint coming from ongoing fiscal austerity on one hand and also credit contraction. and this will continue well within next year. however, the plan that we see that portugal still in recession overall this year may exit recession next year is something that we are looking for and that may prove to really be an assessment that is gaining sort
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of some substance. we have an overall, you know, recovery scenario for the second half which seems to materialize now. >> valerie, thank you very much for being with us. valerie, head of research at credit suisse. now, the national association for business economics released a survey today showing that while many economists, they think that the fed's current policy has been a success, most don't believe that the fed actually is going to start tapering until after its september meeting. so why do we keep talking about september? because only 10% of economists, they expect the winddown to start before the end of september. while 39%, they expect the first tapering in the fourth quarter. the rest, they aren't expecting a scaleback until at least 2014. separately to this. most nab members, they say that future deficits, their bigger concern in the current shortfalls, but they're also divided over how best to address them. now, while fed fears continue to weigh heavily on
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investors' minds, the atlanta fed president, dennis lockhart, he's been telling reuters saturday that he would be comfortable with a cautious scaling back of its bond-buying program which is expected to be announced at its next fomc meeting. speaking to cnbc on friday, lockhart said that he would favor a september taper, although we just heard that apparently few people do. provided there were no really worrisome signs in the economy. >> the way i'm thinking of it at the moment is, i'm actually looking at the data and asking if they deny or in some way undermine the basic outlook that i have in place. on that basis, then i could get comfortable with a move in september of some kind. >> now, lockhart also agreed that the august jobs report will be the key number to watch between now and next month's meeting. we are going to be taking a quick break. before we leave, we need to look at what's on the agenda in the u.s. keep your e-mails and tweets
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coming on the biggest mistake you ever made. loads of you are writing in with pretty costly mistakes, and we'll read some of them out a little later on. but today, the july durable goods orders, they're at 88:positi88:30 a.m. eastern time. we get the latest on monthly manufacturing survey at 10:30 a.m. from the dallas fed as well. @loui @louis @louisaborjesen. we'll see you in a second. [ male announcer ] come to the golden opportunity sales event and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection. a talking car. but i'll tell you what impresses me.
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you are indeed. welcome. i'm louisa borjesen. angela merkel says germaengine doesn't need another debt restructureding. and syria's sa saud goading the u.s. saying any military by the superpower will result in failure. hello, everybody. we need to get you up to speed with some of the other top stories we're following. it's merger monday, as briefly mentioned, amgen striking a deal
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to buy onyx pharmaceuticals for about $10.4 billion in cash. onyx rejected an earlier bid from amgen back in june. the deal is a 44% premium to onyx's closing price right before amgen's initial offer. onyx makes several cancer drugs including treatments for liver, kidney, colorectal cancer as well as multiple myeloma. onyx and amgen both trading higher in german trade ahead of the u.s. market open. a deal to sell kpn's german mobile unit to spain's telefonica has won backing. kpn said that after negotiations involving all three firms, it's now going to be selling its german e-plus unit for 5 billion euros. following the announcement of the sale, american mobile launched an offer to buy the shares that it doesn't yet own at 2.40 euros each. currently owning approximately
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30% of the dutch firm kpn. you're looking at it on screen right now right there is where we're trading, higher by 2.6%. the small things, fun more me. really fun. now, another trading error, not quite as funny. this time in israel, shares in the israel corporation, the largest listed company in israel fell by 99.88% at around midday in the trading session on sunday. "the globe's" newspaper is reporting that a trader put through the order to sell, thinking that it was for another company. but the tel aviv exchange fell by 2.5% triggering a shutdown. we've been asking what's the costliest or the biggest mistake you've made? and loads of you writing in. i'm glad to see i'm not the only one who makes mistake. chris says, "i worked in sales for a french bank. i had to rebook a swaps trade
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internally. i rebooked it. the trader acknowledged it, as did the middle office and back office. then six weeks later they noticed that the subaccounts were booked with the wrong details." the trader therefore had exposure he wasn't aware of. there were several people in the chain who did not do their jobs properly, but i was the only one who got fired." sorry to hear that, chris. we do all make mistakes. hopefully we can grow and learn from them. but it still hurt as long the way sometimes, doesn't it? matt writes through, and he says on twitter, "2008 naked options without hedge will never happen again." i hear you, matt. i hear you. lots of you also writing in on bavarian food because we were talking about some of the bavarian delicacies, given that we're talking about the run-up to the german election. many of you saying you prefer bacon and eggs, things like that. corey writes in, and he says he
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likes the show. thank you very much. good to have you with us. he says, i hope you got a chance to watch the replay of the "mtv video awards" for preparation to today's broadcast. why? what happened? i haven't seen it. let me know. write me. you can find us again on e-mail or on twitter. and he's asking -- he's writing through in the u.s. he's asking, what's the holiday called today? i don't know. it's a bank holiday. do any of you know? guys, what's the holiday called? yeah. it's just a bank holiday. it's just a bank holiday. that's what they call it here in the uk. we have a bunch of holidays. they call them bank holidays. i'm not from here, but it's a bank holiday. more mistakes, anecdotes. sandra writes in on e-mail. she says that there was somebody who wrote in on twitter and that there was a translation mistake that took place, basically, and that this person then managed to move the markets because of a translation mistake. so it happens. the biggest mistake or the costliest mistake that you ever
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made. you can find us on e-mail as well. european -- that's the other show i do -- this one is worldwideexchange@cnbc.com, worldwide@cnbc or on twitter. getting married and divorced twice. says simon. the biggest mistake. come on, simon. you've got to risk it for the biscuit. got to risk it for the biscuit. let's move on. lots of conversation this morning. quiet markets as well. the uk is on holiday. we'll take a temperature of the german manufacturing industry coming up. and an exclusive interview with the ceo of infineon after the break. >> we have a situation in germany which is a culture. we obviously have an engineering culture. maybe it's not at the forefront as everybody thought, but that is what we are living of. [ male announcer ] it's time. time to have new experiences with a familiar keyboard.
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welcome back,gela merkel ha center-right majority which shows her coalition partner fdp losing a point, leaving the bloc with a total of 45%. however, a separate poll from the german public broadcaster shows the german chancellor holding on to a slim majority while her rifles stayed at the low of 25%.
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our reporter joins us once again from munich. annette, it depends on which poll we look at in the run-up to the elections, but she's still, according to most polls, has a small majority. if anything, a small to a large majority, merkel. >> reporter: yeah, actually, i think everybody is pretty clear about the fact that angela merkel most likely will stay as the chancellor of germany. it just depends on the fact with which party she will govern together. the liberals, of course, are the weak spot here because the liberals have to make it above the threshold of 5%. otherwise they won't make it into parliament. and by definition, the coalition partner, and of course the other alternative would be a grand coalition. a lot of people would favor,
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actually, because then you have a lot of support for reforms and a very stable government. so that is one take a lot of people say this would actually be the better outcome. by the way, as well angela merkel, of course, is a very big supporter as well of the car industry here in germany. just remember, she postponed a vote on carbon certificates after the election as well on a european level. and here, of course, in bavaria, we have a lot of car parts suppliers with bmw being one of the biggest car companies. i caught up with one of the suppliers, leoni, located in nuremburg and asked him about his outlook for the car markets. >> 75% of our revenues are done in the automotive industry. i would say the automotive industry is good. and basically due to the fact
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that german automotive industry is very successful in an industrial aspect, supplying many cars to china to the u.s. what's weak for today's business is european countries. in total, we feel very well with this industry. >> reporter: well, of course, one could argue that germany is not really the cheapest place to operate as a supplier. but on the other side, loeni as well made it pretty clear that they depend on skilled labor. as well, i spoke to the infineon ceo, and i wanted to know why they have such a big presence in germany as well because of the fact that it's not really cheap to produce in germany. >> i think it would take years until we recover. i think there are several
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reasons. many people have been -- many countries have been looking with increasing respect to germany because of the industrialization which we still enjoy. looking to our position, many of the technologies we develop together with german customers on this network of competence along the value chain. that means from the very product to the customer and the end market down to semiconductor is something which is very valuable. the government has decided to support this and has enabled funding systems in order to push, i think we have to do more in order to conserve and develop these strengths. >> reporter: so the innovation process will more or less come from countries like germany and not so much from the chinese, right? >> we have a situation in germany which is a culture. we obviously have an engineering culture. maybe it's not at the forefront as everybody thought, but that
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is what we are living of. look at our automotive. look at big industrial companies who are supplying the world. the medium and small enterprises which are offering outstanding specialized solutions. and all of this is based on innovation capability on great ideas of people and brought to success. >> reporter: there are industries which are getting a lot of subsidies and a lot of help, which is not so much the case for the i.t. or semiconductor industry, but what would you like to see more of from future politicians? >> i believe subsidies for investment may not be the right tool. i personally believe much more in supporting r&d and making sure that good ideas become reality. this is, i think, the right thing to do because like kids,
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when they are at the age of 7 and 8, they have to learn to become adult and stand on their own feet, not supporting or subsidizing for long. this distorts markets. and a little bitty think we are suffering in germany from some of these distortions. the renewable energies, great support to make it happen. but maybe we are moving a little bit far of this and considering the costs coming along. it's even a burden which i think is not really putting us in a competitive position. >> reporter: for those jobs where you really need skilled labor and innovation, would you say that you prefer them in germany, or are you indifferent there? >> we clearly have the strategy to focus on high-end engineering and innovation on germany and austria. where we also have a very strong foothold. you have to think in those terms
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and have to retain those. you fascinate these people by challenging jobs and innovation ideas on the return. you get their knowledge when they are there when you need. so i would say stability and employment is a real asset which we enjoy here, and therefore key knowledge is in germany. >> reporter: so it is quite hard for those companies really to find skilled labor because at least here in that region in bavaria, we have nearly full employment which means it makes it very hard. and they, of course, are banking on people coming to bavaria. so everybody who loves to come should study engineering and know a little bit of german and, of course, like sausage before lunch, louisa. >> i know, i know, every now and then. why not? we'll talk about abosomething e
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next time we talk. still to come on the show with the nasdaq trading halt being just the latest glitch to strike the markets, what steps can the exchange and u.s. regulators do to restore confidence in u.s. markets? we'll talk with one market player coming up. here's the futures. implied open, a couple of points lower.
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hello, everybody, welcome. you're watching "worldwide exchange." it's monday. these are your headlines from around the world. no need for haircuts. german chance slor amerillor meo need for a further greek debt writedown. we hear exclusively from the ceos of leoni and infineon in the heart of bavaria, what they think makes europe's biggest economy competitive. >> legal requirements which makes us flexible in terms of hiring people or even getting rid of people. this is necessary for us to be cross-competitive. and it's merger monday in the pharma sector.
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amgen snapping up onyx for more than $10 billion. and failure awaits the united states if it takes action on syria. that's the threat from president assad as u.n. experts there now allowed to visit the site of an alleged chemical attack. you're watching "worldwide exchange," bringing you business news from around the globe. hi, everyone. yeah, business news, political news, a bit of fun, especially on a quiet day today because the ftse, of course, off. bank holiday taking place in the uk. so we've got a quiet session. what we're looking at with regards to the u.s. markets, t setting themselves up for trade. we're indicated flat to a little bit lower on the u.s. markets at the moment in general. european markets, while we were called a bit higher this morning, we're now a little bit lower. you'll note the ibex 35, if i move myself, you can see it, lower by 0.5%.
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in spain, ftse off by 1.7%. we've seen selling in financials and periphery over the last couple sessions. the cac 40 and xetra dax off by around 0.5% as well. another trading error has come to light. and this time it's in israel. shares in the israel corporation, the country's largest listed company, fell by 99.88% at around midday in the trading session on sunday. "the globe's" newspaper is reporting that a trader put through the order to sell, thinking it was for another company. they saw the main exchange fall by 2.5% triggering an automatic shutdown in trading for a short time. both the stock and the index largely recovered the losses by the end of the session. speaking of glitches, goldman sachs has reportedly put four senior tech specialists on administrative leave in the wake of last week's glitch which flooded the market with hundreds of trades. "the financial times" says about
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80% were canceled, but the glitch provoked a strong reaction within goldman which prides itself on risk management. dow jones reports that goldman's losses will be limited to tens of millions of dollars. now, nasdaq ceo bob greifeld has defended the way his exchange handled thursday's three-hour outage. speaking in a first on cnbc interview, he acknowledged the nasdaq needs to get better at, quote, defensive driving. but he reiterated the exchange followed proper procedures. >> where we have to get better is what i call defensive dri driving. so the systems are able to operate by themselves, and this system's been in operation for 20 years. defensive driving means what do you do when another part of the ecosystem, another player, has some bad event that triggers something in your system? you have to -- and it's our responsibility to systems operator to handle those kind of
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unforeseen situations. >> well, joining us next, our guest here on the line, dave lauer, architecture consultant, and he's with us. dave, what do you make of the glitch? do you think that it was a one off? is it unprecedented? is it more serious than what we make it out to be? >> well, i think the glitch itself as a glitch is a little less serious. the reaction's probably the worst part of it. but i think it's part of a pattern that we've seen in markets over the last few years. something i've started calling technology whack-a-mole. you have one problem here, another problem there. it's sort of the nature of complex systems. and i think until we're ready to acknowledge what complex systems are and how to properly deal with them, we're going to constantly see things like this, some worse and some more benign. >> you say that we lately have been seeing these problems.
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i mean, if you have large systems or large business, i mean, won't you always have kind of problems along the way? is it anything new in reality? isn't it just it's another type of problem now? >> well, it's true. so in technology systems and economics systems, you have what's called fault-tolerant design. you have constant failures. you know, the airline industry is a great example. you have constant failures, but generally those failures are transparent. they never bubble up to the surface because systems are still resilient. just because a technology system fails doesn't mean it needs to crash. and we could be designing our systems, engineering our systems in a more robust way so that when they do fail, everything continues to operate. and if they fail catastrophically, we're ready to deal with it. we've practiced what happens when that eventuality occurs. you know, that's the most disconcerting part of the industry's reaction is that they weren't prepared for something like this.
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they hadn't practiced it. >> but they handled the crisis in an all right manner, didn't they? given that it was, according to greifeld, it was due to an outside incident. >> again, you know, if something fails like this, it should fail over in minutes. the system should have been back up and running. the industry should have game planned this. they could have practiced this on weekends just like regulation sci will mandate from the s.e.c. will require mandatory testing, something we should have had for years, and you might have had a five-minute outage. even that is a little high. again, it should have been something that happened, recovered quickly, and you moved on. that's a resilient technology system, not the fragile markets that we have seem to come to expect over the last couple of years from a technology perspective. >> dave, thank you very much. interesting speaking to you. dave lauer, market and architecture consultant in this
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conversation. steve ballmer's election race heating up. we'll speak exclusively to two ceos about what role they feel the next government should play in the recovery. we'll speak more about that after the break. keep your e-mails coming in the biggest mistake that you ever did. super-fun e-mails. it's lovely to read in that a sad kind of way. see you in a second. usua l please. usua thank you very much. ok guys, i'm back. i need a template of a template. oh my gosh. i've never even seen this record, i've only read about it in books. yeah we can get some peanut...that is huge. please don't judge the amount of peanut butter we are getting. from prepaid to platinum, cashback and more membership has a card for every character. i'm carrie brownstein and i get to be whoever i want. this is what membership is. this is what membership does.
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♪ [ male announcer ] the parking lot helps by letting us know who's coming. the carts keep everyone on the right track. the power tools introduce themselves. all the bits and bulbs keep themselves stocked. and the doors even handle the checkout so we can work on that thing that's stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. so everyone goes home happy. and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪ this is the pursuit of perfection.
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welcome back. steve ballmer's exit from microsoft may have been welcomed by investors friday. some say it was more sudden than portrayed by the company. jackie deangelis is live at cnbc headquarters with more. was it, jackie? >> good morning. that's exactly right. steve ballmer's announcement that he decided to step down as microsoft ceo within 12 months came not as a total surprise on friday. all things digital says that while the decision to leave was technically his, ballmer hadn't planned to go quite so soon, especially after announcing a major restructuring plan that he had spent a lot of time working on. the time line was reportedly moved up first by ballmer and then by the board including chairman and co-founder bill gates, agreeing that it would be better if he left now rather than later. ballmer made no mention of gates
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in his resignation letter, fueling speculation that gates may have dropped the ax on his longtime partner. now, ballmer actually indicated that he had planned on staying, saying my original thoughts on the timing would have had my retirement happen in the middle of our transformation to a devices and services company. gates also didn't reference ballmer in any celebratory manner in microsoft's statement other than saying that we're fortunate to have steve in his role until the new ceo takes over. now, while gates hasn't been running the day-to-day operations at microsoft for several years, he's still a key decision-maker on the board. gates had been ballmer's biggest backer despite increasing pressure from inside and outside the company from activist investors such as value act for him to step down. speculation is growing over ballmer's possible successors, of course. and reports say that they could include former hp ceo mark hurd and carly fiorina as well as ray
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ozzie. microsoft jumped. 7.3% on friday. ballmer became ceo in january of 2000 over his tenure. the stock fell 37%. it was the 13th worst performing stock on the nasdaq 100. so investors certainly looking at this as an opportunity for microsoft to potentially get some new blood into the company and bring some positive leadership changes. >> jackie, good to see you. thank you very much for that. getting you up to speed with our headlines, germany's angela merkel says that greece doesn't need another debt restructuring. amgen buying cancer drug maker onyx for $10 billion. and syria's assad goading the u.s. saying any military action by the superpower will result in failure. now, the german chancellor
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has told voters that greece won't need a further debt writedown, but she stopped short of ruling out further aid to the nation. speaking with germany's "focus" magazine, the chancellor said that she was expressly warning against the haircut and that it would create a domino effect of uncertainty in the eurozone. annette rejoins us from munich, bavaria, with more. hi again, annette. >> reporter: hi there, louisa. well, this greece election topic is honestly back on the political agenda here. it's extremely high up. i should say it rose to the top of the agenda ever since going on about a potential third rescue package. but probably it's wiser than me speculating about it to ask my guest who stands next to me, it's the chief economist of
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allianz. so do you think we'll see a greek haircut after the election even though angela merkel is saying no, no, no to it before the election >> well, we will see some additional support for greece, but i would hesitate to call it a haircut. i think there will be some relief for the greek government by reducing further the interest rate it has to pay on its public loans, maybe to prolong the duration of these loans, something like that will happen. and additionally, there may be another fairly small third program coming for greece due to a shortfall in financing, but i don't think that we are in for a real haircut which will hit the taxpayer. >> reporter: talking about germany as well, we were talking the whole morning about the german economy and its good points, where it's very competitive. but as well, we should focus a bit on the challenges for
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germany. so where do you think are the challenges to keep that good position? >> well, the challenges for germany are very clearly on the investment side. we've seen a good recovery. it's a broad-based recovery. exports, consumption, construction is going well. but export investment is still lagging behind. we've seen a good second quarter on investment, but that is not enough. swrer ma germany really needs to safeguard a positive path for growth by investing now. and investment is much smaller than savings in germany, as you know, and that creates a big current account surplus, which is always an issue of criticism abroad. so we need to stimulate investment, and i hope the new government will go for that. >> reporter: then what should the new government do, and what kind of coalition are you foreseeing? >> well, i think that mrs.
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merkel will have another round as chancellor of germany. i personally think there's a likelihood that the present coalition will continue. the liberals are basically the only party in germany that are not playing around with tax increases or with the idea of tax increases. and that are quite conservative on issues of euro rescue. >> you know what? unfortunately, some technical issues there with the line. we'll try to get annette back for you. she's joining us there out of munich. i'm just with interest reading all of your e-mails about the biggest mistakes you ever made. victor says my biggest was after ten operations, excess confidence with myself. don't put on a stop on the 11th position and then lose the incomes. patrick writes through with his biggest mistake. he says he won the 2011 cnbc golf putter.
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congratulations. because of the close correctly. he then swung the putter in the office. super good idea to do that always. crash. he hit someone's coffee automat. 1,000 euros is how much that coffee machine costs. he says now with the guy's new coffee, it tastes better. and the cnbc putter has a place on the shelf. always good to hear. keep your stories coming through. the biggest mistake that you ever made or the costliest mistake. worldwide@cnbc or on twitter. and looking still with interest on all these bavarian cuisines. i promised to tell you what we were talking about. it looks like bread, but it's meat. it would be liver cheese if you translate it had directly, but it doesn't have liver or cheese in it. so a lot of you writing through with funny food names that don't have that food in them. anyway, it's monday. it's a slow monday in the uk because of a bank holiday. ooh. someone also wrote through. paul, i saw your e-mail. it's called the august bank
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holiday, and it has been for more than 50 years. thank you, paul. coming up, the dow closes or looks to snap a three-week losing streak. we'll head to the bond pits in chicago for market insight in a second.
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hello, everybody. you're watching "worldwide exchange." u.s. futures, we're shaping up for a flattish to a slightly lower market open in the u.s. joining us from the cme is ben liechtenstein, president from tradersaudio.com. what are you expecting for trade this week? >> well, ip expei'm expecting te hopefully some of the bid activity we ended the week with last week. we're in an unusual situation right now with the s&ps and the dow lagging a bit, unable to get
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back up above those may 22nd highs which were posted in the s&ps, it represents a 1685 level, in the dow right around 15,520. on the other hand, we've got the faz dak a nasdaq well above levels. really leading the way to the upside. i always give the benefit of the doubt to the broad-based reputation of the russell. so i'm hoping to see some continuation of that, but we do expect to see some energy in the bond market continue. last week the 30-year getting back into record low -- or into new year low prints back around that 129 handle. saw a bit of acomback in the market to close the week back around 131. i expect to see continued energy there. i expect to see continued summertime activity in the stock market. keep in mind this is typically one of the slowest weeks of the year. >> no, it is. you know, we keep talking about the tapering issues. i'm just wondering how much the tapering chat is really playing in on the markets or whether it's all kinds of other stuff,
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and we'll come back to tapering in a couple of weeks. >> oh, no question. it's definitely had -- it's been weighing on the market, if you will, mostly kind of this -- over this longer term, it hasn't really been a one-day event, if you will. what i'm really noticing is the 1705 levels in the s&ps, just from a couple weeks ago, and it really coincides and represents with the beginning and the prolonged kind of conversation if you will that has been going on on the trading floor, no question. and that's what we've been seeing in the bonds come off as a result of. >> ben, very briefly, any big mistake that you've ever made that kind of stands out in your mind? we're talking about mistakes and glitches. i know. >> oh, many, many. yes. i don't want to say them, though. >> i know. i know. >> but i have to ask, i wonder what that guy was doing swinging a putter in the office. i mean, don't you normally keep it right around your ankles? >> you do.
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you do, i guess. my putters go all over the place. ben, thank you very much. we'll see you seen. thanks for watching.
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good morning. amgen inking a deal to buy cancer drugmaker onyx pharmaceuticals. gold is within striking distance of bull market territory. and the new york attorney general says donald trump's university made false claims. it's monday, august 26th, 2013. and "squawk box" begins right now. ♪ i want a new drug ♪ one that won't make me sick ♪ one that won't make me crash my car ♪ good morning. welcome to "squawk box" here on cnbc. that song in honor of the amgen/onyx deal. i'm andrew ross sorkin along with joe kernen and michelle
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caruso-cabrera. let's start with those deals. the first one being that amgen is buying cancer drug maker onyx pharmaceuticals for $125 per share. it's a $10.4 billion deal. and kudos go to tony coles of onyx, 330% gain for him since he became the ceo of that company. the acquisition ends a two-month-long auction of onyx. it is the fifth largest biotech deal in history. a lot more on this story from industry analyst barbara ryan at 6:30 eastern. also, anadarko petroleum in a natural gas filled off the coast of mozambique for $2.6 billion. a subsidiary of india's oil and natural gas corporation is the buyer. and finally, tms spernt repo ss reportedly agreed to sell itself. tms provides procurement in other services to steel mills. "the wall street journal" saying the deal is scrawled at $17.50 in cash. it's a

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